Internet Business Models and Setting Up a Website

Business Models Advertising Only (Single Rev. Stream) Advertising/ Subscription Hybrid (Dual Rev. Stream) Subscription Only (Single Rev. Stream) Transaction (Single Rev. Stream) TV Radio Google Outdoor Cable HBO Newsletters Movies Content access is free Content access cost is low Content access cost is higher DVDs Music Content ownership cost is highest Content creation, distribution, and advertising-delivery business Content creation, distribution, access, and advertising-delivery business Content creation, distribution, and access business Content creation, distribution, and retail business Newspapers Magazines

Internet Business Models Ad supported – Google, Yahoo, Gawker Hybrid – Cable TV, NY Times, Pandora Subscription – HBO, Economist Commerce – eBay, Amazon

Types of Business Models B2B – Business to business: GE, Cisco B2C – Business to consumers: Apple C2C – Consumer to consumer: Craig’s List

Types of Websites/Apps Content publishers – NY Times, ESPN Content aggregators – Google News Social networks (communities) – Facebook Facilitators – Craig’s List Peer-to-Peer – Wikipedia Gaming – Candy Crunch Financial Services – E-Trade Travel – Expedia Health – WebMD Education – Coursera, Code Academy

Online Advertising Models CPM – Cost-per-thousand (M) impressions – Unlike TV, no start or end date – CPM model used primarily for branding Sold guaranteed and programmatically CPC – Cost-per-click – Auction – AdWords Modified Dutch auction – Sold programmatically also CPA – Cost-per-acquisition or per-action Rev Share (typically a hybrid model) Sponsorship

Online Pricing Model Go to and open “Daily Comedy Sponsorship Costs” spreadsheet for an example of an ad pricing (sponsorship) model.

IAB Standard Ad Units * * Check out the latest, because changes occur from time to time.

A Business Model Must Scale In order to get financing from anyone other than friends and family, your startup must be able to scale. – Scale means a company must add revenue faster than it adds costs. Writing a novel scales– you don’t have to write a new copy for everyone who buys the book. Software scales – write it once and sell it to lots of people.

No Scale Services don’t scale. – Services that charge by the hour, such as production companies, advertising agencies, consulting, law firms, gardeners, etc. don’t scale. No scale, no $ from investors.

Setting Up a Website Get a domain name – Buy it (register it) and close mutations (.net,.tv,.us, etc.) on GoDaddy.com or namesecure.com or negotiate with squatter (afternic.com) Serving the domain name and site – Web hosting company – where you registered it or third party such as GoDaddy.com or HostGator.com. Microsoft or Linux server software (some hosting services give you a choice – Linux is less expensive. MySql and Fetch or other interfaces as needed (need some way to FTP files to and edit site) addresses Transfer domain name to server

Design a Site Online platform – Proprietary platform – Server company design software, i.e. SquareSpace Original design 1. Do it yourself - HTML, CSS 2. Word Press, e.g. 3. Drupal (PHP, open source)

Setting Up a Website Design – Read Don’t Make Me Think by Steve Krug – Banner sizes – Navigation – Contact Us – Terms of Service – Privacy Policy – Registration, if needed – Subscribe (RSS), if needed – Video (expensive to serve) – Community (social networking) – Facebook, Google+ Sign In – FB, Twitter, Reddit, etc. links – HTML – CSS – Java – Adobe Acrobat – Video player – Browser compatibility

Setting Up a Website Platform/Architecture – Proprietary (Movable Type, InGage e.g.) vs. open source (Drupal, e.g.) – Get an expert webmaster – Get ad serving if ad supported – Get video serving (Brightcove, e.g.) – Commerce – secure payment, Verisign, PayPal, or outsource it.

Setting Up a Website Marketing (the key to success) – Social Media -- Create buzz (Twitter, Facebook, Instagram, Pinterest, SnapChat, LinkedIn) – Publicity (PR firm) – Advertising (reciprocal deals, Google Search, programmatic) – Viral marketing (not as effective as advertising)